iContainers: Carriers To Prioritize Improving Schedule Reliability ‘In A Perfect World’

Online freight forwarder iContainers says that shipping carriers would only prioritize improving their schedule reliability ‘in a perfect world’.

Recent analysis by SeaIntel on the on-time performance of carriers in Q3 of 2017 revealed a slight increase of 0.2% from the second quarter to 74.7%. Despite the modest increase, this is still more than ten percentage points below 2016 Q3’s 85.3%.

Port cranes and stacks of shipping containers
Image for representation purpose only

iContainers says that due to the high costs involved, there hasn’t been a strong enough push for carriers to prioritize their schedule integrity.

“In a perfect world, improving schedule reliability would be a major priority for carriers. In the real world, this is still far from reality. But the industry has started to head towards digitalization, which will bring about the transparency needed,” says Klaus Lysdal, Vice President of Sales and Operations at iContainers.

“Improving on-time performance will elevate shipping to a whole new level that shippers demand. That involves adapting to emerging technologies. But given the high costs involved, many are simply reluctant. You’ll find that those that aren’t willing to jump onboard will ultimately be left behind.”

Some industry experts have credited the slow recovery to the new alliances that came into effect in April. Even then, they say that compared to previous alliance launches, it has taken a relatively longer time to bounce back this time.

“This could be due to the magnitude of the services and carriers’ sizes, which has increased drastically since 2015 due to the M&As. Carriers may be less flexible to make adjustments to rectify the drop in on-time performance,” explains Mr Lysdal.

“Or it could be exactly that because there are fewer carriers that it’s quite simply not as much a priority.”

According to iContainers, the active hurricane season in the Atlantic may also have played a part. The Barcelona-based freight forwarder has an office in Miami, which has been hit affected by its share of storms over the past few months.

“The current drop could very well be a result of the new alliances. But a very active hurricane season will also have had an effect as well as we’ve had an unusual number of serious storms this year. These tend to have a domino effect. From vessels having to skip ports, to damaged terminal equipment and container congestion that slow down the loading process,” says Mr Lysdal.

“Having said that, given the unexpected nature not only of hurricanes but also the shipping industry, we’ll find digitalization and transparency play even greater roles in the direction we’re heading.”

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